(Adds information on share price, analyst note)
By Gram Slattery
SAO PAULO, May 15 (Reuters) - Shares in Carrefour Brasil dropped over 4 percent on Tuesday after the country’s largest food retailer reported quarterly results that fell short of analyst expectations.
First-quarter net income was 332 million reais ($91.6 million), up 66.8 percent from a year earlier, but below a Reuters consensus estimate of 359 million reais.
Among the drivers of Carrefour Brasil’s growth in the quarter were its e-commerce, non-food, and credit segments, all a key focus of executives in recent months, Chief Financial Officer Sebastien Durchon told journalists.
Still, a higher tax burden, an increase in some expense categories, and persistent food deflation in Latin America’s largest economy hurt the company’s bottomline.
While Carrefour Brasil was able to keep a lid on some operational costs - with expenses related to sales and general and administrative matters at its Carrefour Varejo unit falling 1.4 percent in yearly terms - it did not fare as well in other expense categories
Analysts at Itaú BBA led by Thiago Macruz noted a rise in “other expenses,” which for Carrefour included costs related to asset sales and judicial issues. Macruz also noted the company’s significant tax burden, which surged 53 percent in yearly terms.
As with previous quarters, Carrefour Brasil was also held back by stubborn food deflation in Brazil of 4 percent in the first quarter, according to government statistics. In previously reported figures, total sales rose a modest 0.4 percent.
The company maintained its forecast for the opening 20 new wholesale-style Atacadao stores in 2018, 20 convenience-style Express stores, and 10 supermarkets under the Market brand.
Carrefour Brasil also pledged to expand its online marketplace, in which third-party retailers can sell via Carrefour websites, to 20 percent of its e-commerce sales by the end of the year, up from 11 percent currently.
Among the bright spots was the company’s e-commerce segment, which represented 6.3 percent of total non-gasoline sales in the first quarter, up from just over 3 percent last year.
The company’s credit segment also posted strong results, with earnings before interest, tax, depreciation, and amortization jumping some 25 percent in the same period.
Carrefour Brasil’s shares fell 4.2 percent to 15.57 reais in morning trading, their biggest intraday loss since early February.
$1 = 3.62 reais Reporting by Gram Slattery and Carolina Mandl; Editing by Bernadette Baum